Egypt bans sugar imports for three months on the back of declined prices

EGYPT – The government of Egypt through the Ministry of Trade and Industry has issued a decree to temporarily ban sugar imports for three months, subject to renewal if needed.

According to reports by USDA Foreign Agricultural Services and GAIN, the ban includes refined and raw sugar but exempts white sugar imported for the pharmaceutical industry, though it is still subject to approval by the Ministry of Health.

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The decision to ban sugar imports came in light of the COVID-19 crisis and the subsequent downturn in global oil prices that also led to a 30 percent decline in sugar prices especially raw sugar prices.

In addition, the government intends to protect domestic industry from imports.

It is also worth noting that there has been a recent surplus in production in order to cover market needs through August. Moreover, in the previous period, there was a surge in sugar imports that caused overstocking.

However, this decree to ban sugar imports was adopted beyond the obligations that should be met under the Word Trade Organization.

Egypt consumes about 3-3.2 million tonnes of sugar annually, including 2.4 million tonnes of locally produced sugar.

The country produces almost 80 percent of domestic sugar consumption demand and sources the remaining 20 percent from imports.

Sugar imports accounted to almost US$450 million in 2019. GAIN report forecasts that total sugar import estimates for market year (MY) 2020/21 will remain the same as MY 2019/20 at 830,000 MT. Imports are forecasted unchanged due to a steady production increase.

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Even with the current ban on sugar imports, the report has indicated that post’s forecast would remain unchanged.

The majority of sugar imports are usually imported through the Egyptian Sugar and Integrated Industries Company, which operates as a subsidiary of the Egyptian Holding Company for Food Industries.

Egypt imports both refined white sugar and raw sugar, the majority of which are sourced from Brazil, reaching 62 percent in MY 2019/20.

The remaining sugar imports are sourced from the European Union and small quantities are imported from China but U.S. sugar is not imported in the country.

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